Tuesday, April 10, 2018

From day one, the new government committed to undertaking market-oriented reforms that laid the foundations for a successful transition from socialism to capitalism. The political agenda included monetary reform, the creation of a free-trade zone, a balanced budget, the privatization of state-owned companies, and the introduction of a flat-rate income tax.

...

These reforms paved way for the incredible rise in living standards that Estonia has experienced since independence. Today, Estonia is considered a high-income country by the World Bank, and it is member of the EU and the Eurozone. The purchasing power of Estonians has increased 400 percent over the last two decades despite the severe impact the 2008 financial crisis had on the Baltic economies. In addition, life expectancy has moved from 66 years in 1994 to 77 years in 2016. [links omitted]

Although I would stop short of calling Estonia capitalist, the nation has undeniably moved towards that ideal with impressive results, and over a similar time frame that Venezuela has shackled its economy with central "planning". I am grateful to De La Horra for pointing this out for two reasons. First, It's far easier to help people see Venezuela as a cautionary tale with this contrasting example. Second, and more important, Estonia's example provides the opportunity to go on the offensive, and support freedom, rather than merely oppose socialism.

-- CAV

P.S. Milton Friedman's Free to Choose comes up as an inspiration for Estonia's economic reforms. It would be interesting to see whether Keith Weiner's recent argument that Friedman's "K% Rule" is a "third flavor of socialism" might give them pause.